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u les al depository institutions? m A) A credit union B) A savings and loan association C) A commercial bank D) All of the ab
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Answer #1

In this question Portfolio duration calculation needs Coupon rates and market price, so that we can calculate Macaulay duration. And multiplying Macaulay duration of the bond with respected weights of the bonds gives desired result.

But with the given information, Portfolio Duration will be = 0.25*5years + 0.75*10years = 8.75 years.

Hence, duration of the given portfolio will be = 8.75 years

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